Cars with the Lowest and Highest CPO Premiums

By Julie Blackley

Car buyers who want the benefits of buying a new car, such as a clean vehicle history and warranty protection, but do not want to pay the associated high sticker price may opt for a certified pre-owned (CPO) vehicle. CPO cars differ from traditional used cars because they have been thoroughly inspected by the manufacturer and include an extended warranty along with other incentives. While the added benefits of CPO cars come at a cost compared to traditional used vehicles, the premium for these cars varies widely across models with some being as little as 1.6 percent more.

To determine the CPO cars with the lowest premium compared to their non-CPO counterparts, iSeeCars analyzed more than one million used cars from the 2015 model year to identify the cost differences between CPO and equivalent non-CPO used cars.

“The average CPO vehicle costs 3.6 percent more than its non-CPO equivalent, and consumers are faced with deciding if the terms of the warranty and certification are worth the added cost,” said iSeeCars CEO Phong Ly. “However, certain models have significantly lower-than-average CPO premiums that can bring peace of mind to used car buyers for just a few hundred dollars more.”

The 10 cars with the lowest CPO premiums range from 1.6 percent to 2.1 percent over the cost of its equivalent non-CPO vehicle and include a mix of vehicle types with five SUVs, two pickups, two sedans, and one minivan. The list is dominated by vehicles from Honda, Jeep, and Chevrolet.

The car with the lowest overall premium is the Jeep Wrangler Unlimited at 1.6 percent, which adds an average of $523 to the average non-certified used version. Jeep’s CPO program provides buyers with the remainder of the manufacturer’s original powertrain and extended warranties along with a comprehensive three-month or 3,000-mile warranty that begins when the CPO vehicle was purchased or after the Basic New Warranty expires. “The Jeep Wrangler Unlimited is a four-door version of the Jeep Wrangler, and although it is a rugged off-road vehicle, it lags behind other SUVs in its segment in terms of safety ratings,” said Ly. “The Wrangler Unlimited also maintains its value more than any other SUV, which makes it relatively expensive for a used vehicle, so dealers may opt to reduce the price of certified versions of this car to make it more competitive.”

A second Jeep model, the Grand Cherokee appears ninth on the list. “While the powertrain warranty is longer than some of its competitors like Chevrolet which only offers six years, the three-month or 3,000-mile comprehensive warranty is shorter than others such as Ford that offers 12-months or 12,000 miles,” noted Ly. “The lower premiums of Jeep’s CPO vehicles are also offset by the $100 deductibles that consumers have to pay when they make an eligible repair, while many other automakers such as Mazda don’t carry a deductible.”

Second on the list is the Nissan Rogue, which carries an average CPO premium of 1.7 percent more than its non-certified version, amounting to $302. “Nissan’s low premium can also be attributed to the manufacturer’s below average CPO program, which provides powertrain protection for seven years or 100,000 miles from the car's original sale date, but does not provide comprehensive coverage,” said Ly.

Four Hondas make the list including the third-ranked CR-V, the fourth-ranked Odyssey, the seventh-ranked Accord and the eighth-ranked Civic. “Honda’s CPO terms include a one-year or 12,000-mile comprehensive warranty and a seven-year or 100,000-mile powertrain warranty from the original time of sale,” noted Ly. “Honda CPO vehicles also have no deductible for repairs, which in addition to the warranty terms provide high value at a minimal cost.”

The list is rounded out by vehicles manufactured by General Motors including the fifth-ranked Chevrolet Tahoe, the sixth-ranked Silverado 1500, and the tenth-ranked GMC Sierra 1500. “General Motors has a CPO program similar to Honda’s which includes a 12-month or 12,000-mile comprehensive warranty and no deductible for repairs,” noted Ly. “The main difference is the six-year or 100,000-mile powertrain warranty compared to the seven years offered by Honda, but the CPO still provides a great deal of value at a low premium despite this difference.”

“The CPO programs of the cars with the lowest premiums all include comparable and in some cases identical warranty terms,” noted Ly. Absent from the overall lowest premium list is Hyundai, which is known for its excellent CPO offerings including five years or 60,000 miles of comprehensive coverage and 10 years or 100,000 miles of powertrain coverage, which are the same warranty terms of their new vehicles. “While the premium on a Hyundai Sonata is 2.6 percent, it is still lower than average and amounts to $416 more than its non-CPO equivalent and provides added warranty protection for a slightly higher premium.”

Cars With the Highest CPO Premiums

iSeeCars also examined the vehicles with the highest CPO premiums to help consumers decide if the certification of these vehicles are worth the extra cost. The cars with the highest CPO premiums are exclusively luxury vehicles and have premiums that are close to double the average CPO vehicle. “Given the higher cost of repairs for luxury vehicles, luxury CPOs typically carry a higher premium than their non-luxury counterparts,” said Ly.

The vehicle with the highest CPO premium is the Lexus IS 250, which costs 7.9 percent more than its non-CPO equivalent, amounting to a $2,022 price increase. “Lexus’ CPO program is considered among the best in the luxury segment and offers an unparalleled six-year limited comprehensive coverage without a mileage limit as well as a package including four free maintenance services,” said Ly.

Four models from Mercedes-Benz make the list of the highest CPO premiums including the second-ranked C-Class, the third-ranked E-Class, the fifth-ranked CLA, and the tenth-ranked GLK. The terms of a CPO Mercedes vehicle carries the remainder of the car’s four-year or 50,000-mile limited warranty as well as an additional 12-month unlimited warranty with no mileage limit. “In addition to the warranty, owners of Mercedes-Benz CPOs enjoy perks such as free roadside assistance and trip interruption reimbursements if a warranty-covered breakdown occurs beyond 100 miles of your home,” said Ly. “While the terms of the warranty are short, CPO buyers also have the option to renew the warranty for an added cost.”

Two BMW models make the list including the seventh-ranked X1 and the ninth-ranked 3 Series. The terms of BMW’s CPO program include a one-year extension with unlimited mileage to BMW’s original warranty of four-years or 50,000-miles for its new cars. “BMW’s terms are almost identical to Mercedes-Benz’s, which are ideal for drivers who drive a high number of miles in a short time,” said Ly. “However, BMW and Mercedes lack the extended powertrain warranty of most of their luxury competitors.”

Ranked fourth on the list of CPO cars with the highest premiums is the Cadillac ATS, which carries a premium of 7.6 percent, adding $1,637 over a non-CPO equivalent. While Cadillac is manufactured by General Motors, the luxury brand has a separate CPO program than the non-luxury brands under the General Motors umbrella. “Cadillac’s CPO includes a six-year or 100,000-mile unlimited warranty from its original purchase date,” said Ly. “While Cadillac’s CPO is comparable to other luxury brands, it lacks the unlimited mileage benefits provided by other brands in the segment like BMW, Lexus, and Mercedes.”

The Volvo S60 is ranked sixth, with a CPO premium of 6.9 percent, which adds $1,353 to the price of its non-CPO equivalent. “Certified Volvos have a warranty of seven years or 100,000 miles from its original purchase date, so CPO buyers are covered for what remains when they purchase the vehicle,” said Ly. “In addition to having one of the longest limited warranty terms in the luxury segment, there is also no deductible for repairs that occur during the warranty period.”

Ranked eighth is the Audi A4 with a 6.7 percent premium, or an average of $1,480. “Audi’s warranty terms cover five years and unlimited miles beginning from the vehicle’s original sale date, which isn’t as long of a term compared to its competitors,” said Ly.

“While luxury CPO’s require a higher upfront cost than non-luxury vehicles, the terms are more extensive and provide protection from costly repairs,” said Ly. “It’s important that car buyers understand that some CPO programs cost less than others and they should do their research to see which program best suits their needs and falls within their budget.”

Pickup Trucks CPO Premiums

iSeeCars also analyzed the CPO premiums among light-duty pickup trucks.

The pickup truck with the lowest premium is the Chevrolet Silverado 1500, which carries a CPO premium of 1.9 percent adding $529 to the price of the non-CPO equivalent. Three additional trucks have CPO premiums less than the segment average of 2.8 percent including the GMC Sierra 1500, the Toyota Tacoma, and the Ram Ram Pickup 1500.

“The Chevrolet Silverado 1500 and the GMC Sierra are mechanically identical trucks from the same manufacturer with the same CPO terms, so it’s no surprise that there is only a slight variance between their premiums,” noted Ly.

The pickup truck with the highest premium is the Ford F-150, which has a premium of 4.2 percent or $1,341 above the non-CPO price. “A used F-150 is comparable in price to a Silverado 1500, and the CPO terms are similar with the exception of Ford’s longer powertrain warranty,” said Ly. “Those interested in a used F-150 should look closely at the terms to decide if a CPO version is worth the extra cost.”

SUVs With the Lowest and Highest CPO Premiums

iSeeCars analyzed the popular SUV segment to determine which models had the highest and lowest CPO premiums as compared to the segment average of 3.2 percent.

The top five SUVs with the lowest premiums also appear on the overall lowest premium list. Ranked sixth is the Toyota Highlander, which has a CPO warranty that offers one-year or 12,000 miles of comprehensive coverage in addition to a seven-year or 100,000 powertrain warranty from the vehicle’s original sale date. “The Highlander is known for its reliability, so Toyota likely doesn’t have a high premium because the vehicle isn’t expected to need major repairs while it is still covered,” said Ly.

The Buick Enclave stands out as the only luxury model on the lowest premium list, with a 2.3 percent premium that adds $608 to the price of a standard used version. “Although it’s a luxury brand, Buick has the same CPO terms as the other brands under the General Motors umbrella and presents a good deal for peace of mind on a mid-size SUV with favorable reliability ratings,” noted Ly. “Buicks also have no deductible for repairs, which is rare for CPO programs among luxury brands.”

The SUVs with the highest premiums are mostly luxury vehicles with the exception of three Ford Models including the fifth-ranked Explorer, the seventh-ranked Escape and the tenth-ranked Ford Edge. “When compared to the CPO offerings of luxury brands, Ford’s CPO offerings come short when it comes to perks like unlimited mileage,” noted Ly. “Ford also isn’t subject to the same expensive repairs of other luxury automakers, so those looking for a CPO SUV might want to consider the models with low CPOs that provide more affordable protection and are generally more reliable vehicles.”

Sports Cars CPO Premiums

In addition, iSeeCars compared the average CPO premiums across sports cars. The average sports car has a 3.8 percent premium.

The sports car with the lowest premium is the Chevrolet Corvette at 2.8 percent, which adds $1,387 to the standard used car price. “Although the premium’s percentage is low, it still carries an expensive price tag because of the Corvette’s high average used car price of $51,500,” noted Ly. “Four out of the five lowest premiums are from non-luxury brands, which don’t have as robust warranty plans as those offered by luxury manufacturers.”

CPO Premiums by Brand

iSeeCars also examined the list to determine rankings by automotive brand.

Honda, which appears most often on the overall list of models with the lowest premiums, earns the distinction as the brand with the lowest CPO premium of 1.9 percent. Similarly, Mercedes has the most models on the highest premium list and is the brand with the highest CPO premium across all models at 6.9 percent.

The brands with CPO premiums that are higher than the 3.6 percent average are exclusively luxury automakers with the exception of eighteenth-ranked Ford. “Ford was also the only non-luxury automaker to appear on the list of SUVs with the highest premiums and had the highest premium among pickup trucks, so this reinforces that high CPO premiums are consistent across the Ford brand.”

Cars with the Lowest CPO Premiums by State and Metropolitan Area

iSeeCars also determined the cars with the lowest premiums in the top twenty most populous state and metropolitan areas.

Cars with the Lowest CPO Premiums by State

State

Car

Average CPO Premium (%)

Average CPO Premium ($)

AZ

Honda Accord

3.4%

$594

CA

Honda Civic

1.8%

$282

FL

Volkswagen Jetta

3.1%

$385

GA

Toyota Corolla

3.4%

$448

IL

Honda CR-V

2.1%

$420

IN

Honda CR-V

1.9%

$391

MA

Toyota RAV4

1.9%

$376

MD

Honda Civic

1.9%

$275

MI

Chevrolet Silverado 1500

2.0%

$574

MO

Chevrolet Equinox

3.1%

$549

NC

Chevrolet Silverado 1500

2.9%

$874

NJ

Honda CR-V

1.8%

$361

NY

Honda CR-V

1.6%

$305

OH

Chevrolet Silverado 1500

2.7%

$765

PA

GMC Acadia

2.1%

$534

TN

Nissan Rogue

4.5%

$837

TX

Honda Civic

1.6%

$243

VA

Toyota Camry

2.5%

$414

WA

Nissan LEAF

3.4%

$412

WI

Chevrolet Silverado 1500

3.2%

$977

On a statewide level, the Honda CR-V and the Chevrolet Silverado 1500 tie as the car that appears most often on the list by each having the lowest premium in four states. “Both these vehicles appear on the national list of vehicles with the lowest CPO premiums, which shows that statewide data echo national trends.”

Cars with the Lowest CPO Premiums by Metro Area

Metro Area

Car

Average CPO Premium (%)

Average CPO Premium ($)

Atlanta, GA

Toyota Camry

3.6%

$550

Boston, MA-Manchester, NH

Toyota RAV4

1.8%

$340

Chicago, IL

Honda CR-V

2.5%

$497

Cleveland-Akron (Canton), OH

Honda CR-V

4.1%

$797

Dallas-Ft. Worth, TX

Honda Civic

2.2%

$322

Denver, CO

Toyota RAV4

2.3%

$481

Detroit, MI

Honda CR-V

3.1%

$603

Houston, TX

Toyota Camry

1.9%

$305

Los Angeles, CA

Honda Accord

2.2%

$376

Miami-Ft. Lauderdale, FL

Kia Optima

4.3%

$577

Minneapolis-St. Paul, MN

Nissan Rogue

2.4%

$462

New York, NY

Honda CR-V

1.8%

$351

Orlando-Daytona Beach, FL

Honda CR-V

4.2%

$832

Philadelphia, PA

Honda Civic

2.2%

$327

Phoenix, AZ

Honda Civic

3.6%

$526

Sacramento-Stockton-Modesto, CA

Honda Civic

2.6%

$401

San Francisco-Oakland-San Jose, CA

Nissan LEAF

3.4%

$387

Seattle-Tacoma, WA

Nissan LEAF

3.1%

$386

Tampa-St Petersburg (Sarasota), FL

Toyota RAV4

4.4%

$816

Washington, DC (Hagerstown, MD)

Honda Accord

2.4%

$410

When examining the list by metropolitan area, the Honda CR-V is also the vehicle that appears most often by having the lowest CPO premium in five metro areas. Additional Honda vehicles make the list including the Civic in four metro areas and the Accord in two, which amounts to Honda having the lowest CPO premium in 11 of the top 20 most populous DMAs. “Honda has the lowest CPO premiums of any automaker, so it is no surprise that the majority of the metro areas have a Honda as the vehicle with the lowest CPO premium.”

Conclusion

“Looking at the manufacturers with what are typically considered the best CPO programs, our analysis found some real bargains that can make buying a certified pre-owned car very compelling,” said Phong Ly, CEO of iSeeCars.com. “The data indicates that consumers are more likely to find a CPO car at a highly competitive price from the top brands on our list. However, they should also pay careful attention to what’s included in the certification.”

iSeeCars.com advises consumers to do their research before making a final decision to buy a CPO car. “While our data show that buying a certified pre-owned car doesn’t necessarily add a significant amount to the cost, the benefits should be carefully considered because some CPO programs don’t have as much value as others. Some models also have higher average premiums, and it may be possible to find a much better deal on a non-certified car if you shop around and have an independent mechanic perform an inspection,” Ly said.

Methodology

iSeeCars.com analyzed over one million used cars from the model year 2015 sold between April and September 2018. For each model, the average price of manufacturer certified pre-owned (CPO) cars was compared with non-CPO cars matched on features such as trim, bodystyle, drive type, and mileage. Vehicles with too few data points were excluded from the analysis, as were vehicles not in production as of the 2018 or 2019 model year.

About iSeeCars.com

iSeeCars.com is an online car search engine that helps consumers find the best car deals by providing key insights and valuable resources, like the iSeeCars VIN report. iSeeCars.com has saved users over $168 million so far by applying big data analytics powered by over 25 billion (and growing) data points and using proprietary algorithms to objectively analyze, score and rank millions of cars and thousands of dealers. Based in the Boston area, iSeeCars.com was founded by former TripAdvisor and SAP executives determined to improve the car shopping experience for consumers.